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Today in Washington: Federal student loan rates double

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President Barack Obama greets students last month after he called on Congress to stop interest rates on student loans from doubling during a news conference in the East Room of the White House in Washington.
(AP)

The change affects some 7 million college students who plan to take the subsidized Stafford loans for the upcoming semester, but will not affect the rates on existing loans. The average loan will end up costing about $2,600 more because of the increase.

Although the Senate could not agree on a deal before it left Washington on Friday for an extended July 4 break, Senate Democrats are pushing for a vote July 10 on a measure that would provide a retroactive one-year extension of the 3.4 percent rate.

The rate increase comes as U.S. Sen. Kirsten Gillibrand, D-N.Y., is touting her own legislation that would allow students to refinance their federal loans. Gillibrand's Federal Student Loand Refinance Act would allow refinancing at a fixed rate of 4 percent.

"The typical student in my home state of New York owes nearly $27,000 in student loan debt, and 11 percent of students defaulted on their payments from 2009-2012," Gillibrand said at an event in Washington.

With the nation's total student loan debt near $1 trillion, experts say now is a good time to strategize on how to keep your student loan debt to a minimum.